Fuel Prices Set to Rise Again in Israel After Recent Reduction

Drivers in Israel are bracing for another increase in fuel prices, with the cost of a liter of 95-octane gasoline expected to jump by more than 40 agorot (about $0.11) in the upcoming October update. This would push the price back above the 8 shekel threshold, shortly after it had fallen to 7.75 shekels due to a temporary reduction in excise duty. The final price will be determined in the coming days by the Ministry of Energy and Infrastructure, based on a formula that includes regional gasoline prices, the dollar exchange rate, marketing costs, excise tax, and VAT.

Last month, the price of gasoline had reached 8.25 shekels per liter. In response, Finance Minister Bezalel Smotrich approved a temporary 50 agorot per liter cut in excise tax, which brought the price down to 7.75 shekels. Despite this reduction remaining in effect, rising global gasoline prices and other components of the calculation formula are now driving the expected increase.

If the current projections hold true, most of the relief drivers experienced last month will be eroded. For drivers filling a 50-liter tank, an increase of over 40 agorot per liter translates to an additional cost of approximately 20 shekels per refueling. A larger actual increase would result in a higher cost for consumers.

Beyond the direct impact on drivers, the rise in fuel prices could also lead to increased transportation and shipping costs, potentially affecting the prices of goods and services across the economy. The Ministry of Energy and Infrastructure will publish the final maximum price after reviewing updated trade data and completing the official calculation.